Monday, October 20, 2008

Iconic Irish company Waterford Crystal (WATFF) will lay off most of its workforce and shift production elsewhere, having already contracted most of its production to Slovenia.

At its height in 2002, Waterford employed 3,200 people, but that number will soon drop to approximately 125.

The company's plant will remain in Dublin, though it will become primarily a tourist attraction, rather than a manufacturing plant. Waterford, which manufactures the ball dropped each New Year's Eve in Times Square, draws about 300,000 tourists each year.

The decline of the dollar is partially to blame, as about half of the company's revenue comes from American consumers. Also to blame are the living wages paid Western European workers; Eastern European laborers can produce high-quality goods for far less pay.

Much as the newly-unemployed workers dislike being jobless, investors seem to like the new direction, bidding Waterford stock up 50% to 0.3 euro cents. (The company's market cap remains less than a tenth of its debt.)

A union representative had this to say: "That [employees] will now seemingly be cast aside and production moved to just another factory overseas is devastating."

Outsourcing is already de rigueur here in America, as companies from Procter & Gamble (PG) to DuPont (DD) to Cisco Systems (CSCO) have sent jobs overseas. Atul Vashistha, CEO of outsourcing consultant neoIT and co-author of the book The Offshore Nation, told BusinessWeek: "Many CEOs are saying, 'Don't tell me how much I can save. Show me how we can grow by 40% without increasing our capacity in the U.S."

Eli Lilly (LLY) is a good example. For each new drug it releases, it estimates the cost to be somewhere around a billion dollars. However, according to the same BusinessWeek article, outsourcing lowers those costs to about $800 million. Lilly now does 20% of its chemistry work in China at a 75% savings; it's also trying to cut costs on clinical trials by conducting them in Brazil, Russia, China and India. When most people think of outsourcing in this country, they think of India. General Electric's (GE ) John F. Welch Technology Center -- named for their famed ex-CEO -- isn't located anywhere near GE's headquarters in Fairfield, Connecticut. It's in Bangalore, India.

A quarter of the Welch center's engineers have Ph.Ds. They design turbine-engine blades for jet aircraft; they study the molecular structure of materials used in short-term-use DVDs, which automatically erase after a certain period of time. Workers at the center have filed for 95 US patents since 2000.

Morgan Stanley (MS), JPMorgan (JPM), and Goldman Sachs (GS) employ Indian analysts and back-office workers. (Though someone working in Madras may be better-described as back-back-back office.)

But something interesting is now happening: India is outsourcing outsourcing.

To Mexico, because Indian workers are just too expensive these days.

Tata Consultancy Services (TCS) opened a software development center in Guadalajara, providing about 5,000 jobs to Mexicans over the next 5 years.

New Delhi-based IT firm Genpact (G), self-described as "a world-class" alternative to India for IT outsourcing, opened a 125,000-square-foot facility in Ciudad Juárez, employing 2,500 people.

Bangalore's Infosys (INFY) set up shop in Monterrey last year - 150 miles south of the United States border.

This is the new paradigm: A company in the United States pays an Indian vendor 7,000 miles away to supply it with Mexican engineers who work within driving distance of America.

It's what happens when a country's companies are trying to cope with wage inflation hovering around 15% annually.

So, the next time you boot up your PC, remember: the software you're using could well have been dreamt up by someone in San Jose, developed by someone in Matamoros, tweaked by someone in Mumbai, manufactured in Hermosillo... And if you need tech support? Expect it to come full circle to Bangalore.

Adios!

No positions in stocks mentioned.

Justin Rohrlich welcomes your comments and feedback at jrohrlich@minyanville.com

Minyanville staff and contributors may trade or hold securities that are discussed in an article. Staff and contributors will indicate whether they have a position in any security discussed, but will not indicate size or direction. The information on this site is not intended as individualized investment advice and all investment decisions by a reader must in all cases be made by the reader either individually or together with his/her investment professional. The views expressed in articles appearing on this site are solely those of the staff and contributors and should not be attributed to any other person or entity except where expressly stated. Minyanville staff and contributors will not respond to requests for investment advice.

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Thursday, October 16, 2008

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HP signs 10-yr outsourcing pact with Godrej, to take over IT staff
16 Oct, 2008, 0113 hrs IST, ET Bureau

MUMBAI: In a major domestic outsourcing deal, Godrej Industries and Godrej Consumer Products have signed a 10-year outsourcing contract with Hewle

tt Packard (HP). The value of the contract was not disclosed, but would include application development and maintenance, infrastructure management and transformational initiatives. As part of the agreement between the firms, HP will also take over the staff working in the IT operations of the two companies.

Since the first such outsourcing deal between Bharti and IBM, a number of similar deals have been announced by Indian business groups. In February this year, the Future group had signed a similar outsourcing deal for $150 million with Wipro, in which about 265 employees of Pantaloon Retail had moved to the IT firm. In this case, the IT management staff will be retained by Godrej, while the IT operations staff will move to Hewlett Packard.

These contracts help domestic firms to cut IT costs and bring in greater efficiencies. For multinationals, this represents a new and growing business opportunity when most of them are facing growth pressures in their home markets. The Godrej group had appointed Ernst & Young to help them identify the most suitable IT partner.

The Godrej win is significant for HP because it is in segment outside of financial services, which has traditionally been its strongest segment. Sometime back, it had also won a transformation engagement from Britannia.

More high-end American jobs being outsourced to India

By John Boudreau

Mercury News

Article Launched: 10/16/2008 12:00:00 PM PDT

CHENNAI, India — The sari-clad graphics designer knows nothing about American football. But there she was, putting the finishing touches on an automobile dealership ad tied to the kickoff of the NFL season for a New York newspaper.

She goes by only one name, Vijayalakshmi, and she is the face of the new global worker. She and her colleagues at 2AdPro Media Solutions, a two-year-old start-up, create ads for scores of U.S. newspapers at assembly-line speed in this steamy, sun-beaten coastal city that aims to be a global publishing hub.

Across India, a new, sophisticated outsourcing industry is emerging, one that requires skills well beyond those needed for traditional call-centers. And it extends well beyond publishing work.

"Anything that can be outsourced is being outsourced today in India," said Rajdeep Sahrawat, vice president of Nasscom, or the National Association of Software Service Companies, an Indian software industry trade organization that closely monitors trends in outsourcing.

The emergence of this new outsourcing industry is a cause for anxiety among some American workers. The liberal think tank Economic Policy Institute said as many as 18 percent of all California jobs — mostly white-collar work — are candidates for offshoring.

The labor-backed California Fair Trade Coalition said virtually any job that uses a computer could be outsourced, and it argues that U.S. trade laws should be changed

to make it more difficult for companies to send work overseas.

Imelda Abarca, director of the coalition, said the Internet increasingly enables near-seamless outsourcing of professional work to India, China, Eastern Europe and other regions, putting more and more high-paying American jobs at risk. "Those countries have large and rapidly growing pools of talented people with much lower incomes than people with similar skills in the United States."

But some experts say the threat to high-end American jobs is overstated.

India remains "an undergraduate factory," said Raffiq Dossani, a Stanford University researcher who studies higher education in the South Asian country. "This limits the kind of work that can be outsourced to India."

Whatever its ultimate impact, this next-generation of offshore work — some call it KPO for "knowledge process outsourcing'' — is drawing business from across professional sectors in the United States. These new companies link the legions of highly trained graduates that India's vast college system produces every year to U.S. companies eager to cut costs.

"A majority of Americans are not even aware of the type of high-end work being done in India — tax filing preparations, medical diagnoses, legal work, financial portfolio analysis." said Pervez Sikora, a former U.S. newspaper executive who is now chief operating officer for 2AdPro Media Solutions. "The types of services being offered here are mind-boggling."

While these highly skilled professionals currently represent only a thin slice of India's 2 million tech and business outsourcing workers, their ranks are growing rapidly, industry experts say. Nasscom's Sahrawat said the category is too recent for his organization to track. But Sikora, who said he's been approached by Silicon Valley companies that want to outsource their marketing work, believes this new type of outsourcing will eventually grow to a multibillion-dollar industry.

"There is a talent pool in India beyond engineering," said Vani Kola, a Silicon Valley entrepreneur who is managing director of Santa Clara-based NEA-IndoUS Ventures, which invests in high-end outsourcing companies in India. "And this talent pool has never been tapped."

Increasingly, Western companies must turn to countries like India, where 50 percent of the population is under 25, added Kola, now based in Bangalore. "The world's workforce will come from these countries because they have the masses. They are going to fill the gaps. Knowledge process outsourcing will change the role Indians play in the global economy."

Kola sees growth in many directions. "Disney and DreamWorks have large animation studios in India," she noted. ''Nobody is saying create the movie concept here, but part of the process is being done here."

One company Kola backs is PreMedia Global, a start-up that provides research, writing and editing services to publishers of U.S. textbooks. In two-and-a-half-years, PreMedia has grown from a brother-and-sister operation to a company with 900 employees, 600 of whom are based in Chennai.

Initially, the siblings considered launching a call-center operation, said co-founder Kapil Viswanathan, who studied engineering at Stanford University. However, they quickly saw that the nature of outsourcing was changing.

"High-end, knowledge-based services — that's where the growth is coming from," he said. "We think this is just the tip of the iceberg."

In short order, Viswanathan and his sister lined up clients that produce textbooks for schools across the United States, including California.

"A publisher gives us the detail of the content — what they submitted to each state — and says, 'You guys develop this into a book," he said. "It could be math, it could be science, it could be reading."

Not everything is easily transferred to India, though.

Employees at 2AdPro receive regular training in American culture, from Thanksgiving Day to the popularity of Harley-Davidson. Nevertheless, glitches occur, such as using a photo of a dancer from India for an ad calling for an American Indian, or placing a Philadelphia Eagles football player in an ad associated with bitter rival the Miami Dolphins.

"You get push back from some people, 'Those ads from India, they don't look right,'" said Austin Ryan, vice president of production for Gannett, the nation's largest newspaper publisher and a 2AdPro client.

Two years ago, it was a tough sell to convince newspaper executives that someone sitting halfway across the globe could produce ads that are accurate and on-time, said Todd Brownrout, chief marketing officer at 2AdPro, which expects to expand from 350 employees to 1,000 next year. Now, he added, "We are getting multiple inquires a day."

Sanjiv Gupta, chief executive of Hyderabad-based Pressmart, which provides Internet technology services to publications, argues this outsourcing model can be applied to editorial content. "It's outsourcing of creativity," he said.

Appert and others, though, think that day will never come. No amount of cultural sensitivity classes can compensate for direct understanding of local news, they say.

While debate continues over just which American jobs may be vulnerable to outsourcing, executives like 2AdPro's Sikora acknowledge that the new global economic order is forcing Americans to reposition their careers.

"People have to understand how jobs are changing and start re-inventing themselves,'' he said. "No one will be able to stop this now."

Wednesday, October 15, 2008

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WRAPUP 6-Iceland cuts rates, Russia studies loan request

Wed Oct 15, 2008 4:24pm EDT

* Iceland slashes interests rates

* Russia agrees to consider loan request

* Belgium, EC say ready to help

By Patrick Lannin and Omar Valdimarsson

REYKJAVIK, Oct 15 (Reuters) - Iceland acted to shore up its ravaged economy by slashing borrowing costs on Wednesday and its officials pursued efforts with Russia to get a multi-billion euro loan to help it over its worst financial crisis.

Talks in Moscow ended with Russia agreeing to consider the request for a loan which the North Atlantic island initially put at 4 billion euros ($5.45 billion). No date was set for a new round of discussions.

"We are working thoroughly on the issue to take a final decision", Russian Deputy Finance Minister Dmitry Pankin said in a statement after talks ended.

Russian officials say no details have been agreed although they are looking on the loan request favourably.

Icelandic Prime Minister Geir Haarde said the delegation might stay in Moscow or return to Iceland to continue talks from home as the government grapples with a crisis that has brought down the banking system and made the local currency untradeable.

"But it would be best if this could be resolved now," he told a news conference in Reykjavik.

Importers said on Wednesday the country had food stocks for about three to five weeks but needed quickly to restore a proper foreign exchange market so that importers could get back to normal business and avoid shortages.

Earlier, the central bank cut its main interest rate to 12 percent from 15.5 percent.

In Brussels, European Commission President Jose Manuel Barroso said it was to help Iceland over the financial crisis.

And Belgium offered a lifeline to Kaupthing Bank, where thousands of Belgians have savings, and said Prime Minister Yves Leterme would meet Haarde in Iceland on Friday.

"We are trying to see how we can help through an intervention of the IMF (International Monetary Fund)," Belgian Finance Minister Didier Reynders said on arrival at a European Union summit.

Iceland is due to present a plan to the Washington-based IMF in the coming days and is widely expected to seek funds.

Iceland's crisis is an unusual situtation for the IMF. Its economy of some 300,000 people is highly developed and years of rapid growth have brought it unprecedented prosperity.

Icelandic banks in recent years embarked on a campaign of unbridled expansion, building up operations overseas but taking on huge debts. When global credit markets froze, the banks found themselves unable to meet obligations.

Now, with the economy reeling, people are confused.

"You do not know what is happening, you do not feel informed. Will the IMF come and take control?" said Arni Gudmundsson, a 29-year-old self-employed man.

He said the rate cut was a good idea. "And I think they will have to take them down further simply in order for people to survive."

BORROWING COSTS

Iceland has had high interest rates for several years as the central bank has tried unsuccessfully to rein in inflation.

"The next phase of the banking crisis will be difficult with severe economic contraction," Sedlabanki said in a statement released in Icelandic on its Web site.

The crisis would mean the loss of many jobs, it added.

The rate cut "will help companies that will now have to be financed by Icelandic banks. This will be a big help for them," said Asgeir Jonsson, analyst at Kaupthing. He said inflation would be countered by the sharp fall in the housing market, which accounts for 20 percent of the consumer price index.

Kaupthing, the largest bank in Iceland, was taken over last week by the state along with Landsbanki and Glitnir.

"The main thing is that they have to stabilise the currency and get the payments system going again," Jonsson said.

A NEW SYSTEM

On Tuesday, Iceland drew on swap facilities it had set up with Nordic nations, tapping Denmark and Norway for 200 million euros ($273 million) each to help get its currency market working again.

Sedlabanki said it had set up a temporary trading system to allow for international currency transactions, while it wanted to continue to limit foreign currency outflows from the country.

Haarde said Iceland had approached the NATO council to complain about Britain's use of anti-terrorism laws to take Iceland's largest bank into administration.

President Olafur Ragnar Grimsson told Reuters that Icelanders were still angry with Britain. Icelanders understood that their own banks had created the problems they now faces by overextending themselves.

"We are realistic, we have a strong fighting spirit. We realise this will be an uphill battle, but there is also a strong sense of determination and optimism among everyone I have met," he said." (Additional reporting by Adam Cox, Niklas Pollard and Anna Ringstrom in Stockholm, Lesley Wroughton in Washington, Ingrid Melander in Brussels, Toni Vorobyova and Dmitry Zhdannikov in Moscow; editing by Angus MacSwan)

© Thomson Reuters 2008. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and its logo are registered trademarks or trademarks of the Thomson Reuters group of companies around the world.

Wed, Oct 15, 2008 6:11 EDT

The Key Drivers Behind Knowledge Process Outsourcing

Posted by: ExecutiveBrief in Best Practices

Topic: Enterprise Management

Current Rating: Comments: 0

Knowledge Process Outsourcing (KPO) has become an offshoot of business process outsourcing over the years. While BPO focuses on basic back-office services, such as data entry, transaction processing, or customer service, KPO requires higher level of specialization in practically all aspects of outsourcing management, such as organizational communication, information analysis, and systems design and integration to name a few.

The shift from business process outsourcing to knowledge process outsourcing did not happen by accident. Instead, the ongoing change is a natural outcome as players in the BPO gain the necessary expertise needed to provide higher-level outsourcing services. The key drivers cover hardware/software advances, human capital, process maturity, and "soft skills" management. Let us look at some of the key drivers of KPO.

Improvements in technology infrastructure
Technology is the backbone of business process outsourcing. Through the years, infrastructure improved and acquisition of hardware and software became more affordable. Fiber optic cables and satellite communication became widely available, allowing vendors and clients to transmit data and enjoy instantaneous communication from different parts of the globe. Clients and service providers no longer have to be in the same location. In most large corporations, people and knowledge are just a few clicks away, no matter the time zone.

BPO experience
KPO is important in the success of an organization for it deals with the management of a large body of critical organizational knowledge. In the era of knowledge economy, companies that take information—in every form—have a competitive advantage over their peers. They exploit the knowledge gained from R&D, customer service, and research and analysis to attain their key business objectives. Over time, the experience and expertise that they earned in these efforts are reinvested to provide more complex services.

Human capital
As the outsourcing industry became more competitive, companies sought to hire only the best talents that vendors could provide. In turn, vendors made sure that the consultants that entered their payrolls had the right tools to provide the services that their clients demanded. Millions of dollars are being spent yearly on updating workers' knowledge in application development, project and team management, business and data analysis, and soft skills. College degree alone is not enough to gauge a candidate's aptitude for the job; post-graduate degrees and certifications are some of the key selling points for talents. At the start of the decade, Eastern Europe's oversupply of engineers fueled its IT outsourcing industry, thanks to its educational and economic model's--and history's--emphasis on courses in the sciences.

Moreover, surveys have often pointed to the fact that "soft skills" are among the top competencies that companies look for, in addition to technical aptitude. Outsource workers eventually graduate from "sweatshop jobs" to highly analytical specializations. This development resulted not only in performing tasks, but delivering results.

Lower Cost
As in BPO, cost is a key driving force behind the growth in KPO. It allowed companies to access more and promising talents located in different territories without having to shell out as much as they would have on onshore knowledge workers. Even with the valuable knowledge they bring on the table, offshore outsource talents still command competitive salaries compared to their onshore counterparts.

By ExecutiveBrief
Technology Management Resource for Business Leaders
www.executivebrief.com

MexicoIT Honored with "Outsourcing Marketing Excellence" Award in the US IT Market

Last update: 2:15 p.m. EDT Oct. 15, 2008

MEXICO CITY, Oct 15, 2008 (BUSINESS WIRE) -- MexicoIT was honored with the "Outsourcing Marketing Excellence" Award at the Midsize Enterprise Summit 2008 recently held in Dallas, Texas, for successfully promoting the Mexican IT industry and helping it to effectively penetrate the US IT market. The Summit was organized by United Business Media (UBM) with the participation of key Gartner Research analysts.

"This award reflects our commitment to the IT industry in Mexico and demonstrates that MexicoIT is achieving its goal of positioning Mexico as the ideal destination for IT outsourcing and investments by US companies," said Rogelio Garza, General Director of the National Chamber of Electronics, Telecommunications, and Information Technologies (CANIETI) and head of Mexico IT. "This award is an achievement shared by the entire MexicoIT family - its companies and member states, industrial chambers, associations, and the Federal Government through PROSOFT. It urges us to continue driving this campaign towards new frontiers," Garza concluded.

The award highlights MexicoIT's effectiveness in creating in a short time a strong awareness in the global marketplace about Mexico's unique advantages as an IT sourcing country. This awareness positions Mexico as the preferred outsourcing destination in the America's for US companies. The advantages include the true nearshoring benefits derived from Mexico's, proximity to the US, cultural affinity, and similar time zones, and also the strong support of the Federal Government to the country's IT industry's growth.

Rogelio Garza received the award from Nancy Hammervick, UBM's Executive Vice-President. In her speech she recognized the efforts of CANIETI and the support of the Mexican Ministry of Economy to the promotion of the Mexican IT industry provided through the Software Industry Development Program (PROSOFT). The award ceremony was attended by executives of Mexican IT firms, UBM, CANIETI and MexicoIT.

About MexicoIT

MexicoIT is the first program in Mexico with the mission to promote the Mexican IT (Information Technology) services industry abroad. MexicoIT is operated by the National Chamber of Electronics, Telecommunications and Information Technologies (CANIETI), an industry association of leading IT companies in Mexico. The Mexican Ministry of Economy supports MexicoIT through the Software Industry Development Program (PROSOFT). The MexicoIT team includes: Monica Senderos, Elisa MuAoz and Horacio Frias. Daniel Tkach, CEO of PartnersMarket Consulting, is MexicoIT's marketing consultant.

SOURCE: MexicoIT

For MexicoIT 
Burson-Marsteller 
Sonia Diaz, 305-347-4396 
sonia.diaz@bm.com

Tuesday, October 14, 2008

At Indian Call Centers, Another View of U.S.
As Economy Falters, Debt Collectors Hear Sobering Stories From the Land of Plenty

By Emily Wax
Washington Post Foreign Service
Tuesday, October 14, 2008; A08

GURGAON, India -- With her flowing, hot-pink Indian suit, jangly silver bangles and perky voice, Bhumika Chaturvedi, 24, doesn't fit the stereotype of a thuggish, heard-it-all-before debt collector. But lately, she has had no problem making American debtors cry.

For the past three years, Chaturvedi has been a top collection agent at her call center, phoning hundreds of Americans a day and politely asking them to pay up. As the U.S. financial crisis plunges Americans into debt, her business is one of the fastest-growing sectors in Indian outsourcing. It is also one of the few sectors of outsourcing in India that is still hiring aggressively.

Sitting in a narrow cubicle, her head-set switched on, Chaturvedi listens every night to increasingly disturbing tales of woe from the other side of the globe.

"My mortgage payments are just too high, honey. I just can't make the payment this month," a weeping woman with a Southern accent recently told her in response to a call for a $200 credit card payment. "I'm sure y'all heard about the credit crunch and gas prices. I'm flat broke."

"Ma'am, I am here to help you," Chaturvedi calmly said. "Ma'am, maybe you could make a small payment, $100 or $50, anything that you can."

Few places in India absorb and imitate American culture as much as call centers, where ambitious young Indians with fake American accents and American noms de phone spend hours calling people in Indiana or Maine to help navigate software glitches, plan vacations or sell products. The subculture of call centers tends to foster a cult of America, an over-the-top fantasy where hopes and dreams are easily accomplished by people who live in a brand-name wonderland of high-paying jobs, big houses and luxury getaways.

But collection agents at this call center outside New Delhi are starting to see the flip side of that vision: a country hobbled by debt and filled with people scared of losing their jobs, their houses and their cars.

"Lately, 25-year-old Americans are telling me that they are declaring themselves bankrupt," said Chaturvedi, raising her eyebrows in shock. "These days the situation is so emotional, so fragile. We have to have so much empathy and patience."

"It's like people are totally drowning," said Omkar Gadgil, 24, who goes by the alias Richard Rudy and was a math major in college. He is brainy and considered the office expert on the intricacies of debt collection. "There has just been years of overspending and now: the crash."

In the past, debt-saddled customers were often annoyed by Chaturvedi's calls from the open-air office at Aegis BPO Services. But now they seem depressed, defeated. Even the men sob into the phone, several agents said.

Under the pseudonym Carol Miller, Chaturvedi's ability to deftly work around the standard line, "The check is in the mail," is now being challenged by clients throwing out new responses: "How do you expect me to pay? This is the worst crisis since the Great Depression."

Chaturvedi said she has never seen it so bad. Many of the young employees say they are flabbergasted at just how widespread the financial ruin appears to be.

Talking to so many anguished Americans has taught these agents an important lesson: Live within your means. Agents with credit cards are vowing to pay them off every month, even during the upcoming holiday shopping season, when malls feature neon signs advertising flat-screen TVs and air conditioners.

Managers of this call center say they have recently added a seminar on the economic crisis, with PowerPoint slides that graph the financial mess as well as updates on other events that could affect the ability of U.S. debtors to pay their bills, including natural disasters such as Hurricane Ike. The presentation is intended to enable collection agents to bond with their clients, and possibly deflect their excuses.

Since the crisis began, agents have seen call times shoot up dramatically because late payers often want to talk more. More callers have moved. More phones have been disconnected. Clients have started bargaining with agents for discounts on their debts "as if they were haggling at an Indian vegetable market," said Rhoit Chug, assistant vice president of training for Aegis.

India handles an estimated $16 billion -- or about 5 percent -- of delinquent U.S. accounts. More complicated health insurance bills and mortgage payments are still largely handled inside the United States, industry executives say.

But the debt collection business will continue to grow as debt rises and companies look to cut costs, industry experts said. Aegis, which handles nearly a fourth of debt collection outsourced from the United States, is undergoing a rapid expansion. The company is erecting a second office building for 5,000 employees, many of them to be hired over the next few years. Most employees are college-educated and in their 20s. They earn about $5,000 a year, a competitive starting salary in India, but less than a fourth of what their American counterparts make.

Inside the Aegis call center, there is a clean, colorful cafeteria with round tables and darts to relieve stress. Because New Delhi is about 10 hours ahead of the eastern United States, there is an espresso machine and candy counter to keep the young workers awake while calling through India's night.

Aparup Sengupta, global chief executive officer and managing director of Aegis, encourages his debt collectors to use a "hospitable Indian touch," meaning less arm-twisting and more emotional therapy.

"This business is a performing art," Sengupta said. "We are part therapists because the core of the issue is that every human being wants to be honorable in life. We don't just push someone into a bad situation. We try to create a real solution."

Decorating the office are dozens of yellow smiley faces with the words, "Happy People. Happy Customers. Happy Investors," along with other posters that read: "Connect and Collect."

"How is the car running?" asked Parul Malhotra, 25, who goes by the alias Michelle Jones.

"It's a real piece of junk," the customer shot back, his voice registering more depression than anger. "It was in the shop. The electric's all messed up. And I have no money now. Plus, we have an illness in the family."

"Times are hard. I wish for everyone a speedy recovery," said Malhotra, trying to be cheerful. After a pause, she got back to business: "But let's try to work out a payment."

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What's New in Outsourcing

Monday, October 20, 2008

Outsourcing the Outsourcers

Justin Rohrlich

Oct 20, 2008 8:30 am